GDI Integrated Facility Services Inc. Releases its Financial Results for the Fourth Quarter and the Year Ended December 31, 2022

• Q4 2022 revenue of $588 million, an increase of $155 million, or 36%, over Q4 2021.
• Q4 2022 Adjusted EBITDA¹ of $41 million, an increase of $7 million, or 21%, over Q4 2021.
• Q4 2022 net income of $10 million or $0.41 per share compared with $7 million or $0.30 per share for the fourth quarter of 2021.
  
  
• 2022 revenue of $2.17 billion, an increase of $575 million or 36% over 2021.
• 2022 Adjusted EBITDA¹ of $153 million, an increase of $20 million, or 15%, over 2021.
• 2022 net income of $36 million or $1.57 per share compared with $43 million or $1.89 per share in 2021.

LASALLE, QC, March 1, 2023 /CNW/ - GDI Integrated Facility Services Inc. ("GDI" or the "Company") (TSX: GDI) is pleased to announce its financial results for the fourth quarter and the year ended December 31, 2022.

For the fourth quarter of 2022:

• Revenue reached $588 million, an increase of $155 million, or 36%, over the fourth quarter of 2021, comprised of 10% Organic Growth, 23% growth from acquisitions and 3% growth from the appreciation of the U.S. dollar relative to the Canadian dollar.
• Adjusted EBITDA¹ amounted to $41 million, an increase of $7 million, or 21%, over the fourth quarter of 2021.
• Net income was $10 million or $0.41 per share compared to $7 million or $0.30 per share in Q4 2021. The increase of net income is mainly attributable to lower income tax expense of $4 million in the fourth quarter of 2022 compared to 2021.

For the fourth quarters of 2022 and 2021, the business segments performed as follows:

(in millions of Canadian dollars)	Janitorial Canada		Janitorial USA		Technical Services		Complementary Services		Consolidated
	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021
Revenue	144	140	176	89	250	190	25	18	588	433
Organic Growth (Decline)	3 %	1 %	(2 %)	9 %	20 %	14 %	39 %	(40 %)	10 %	5 %
Adjusted EBITDA^1	16	18	14	8	17	12	(1)	(1)	41	34
Adjusted EBITDA Margin^1	11 %	13 %	8 %	9 %	7 %	6 %	(4 %)	(6 %)	7 %	8 %

For the year ended December 31, 2022:

• Revenue reached $2.17 billion, an increase of $575 million, or 36%, compared to 2021, comprised of 9% Organic Growth, 26% growth from acquisitions and 1% growth from the appreciation of the U.S. dollar relative to the Canadian dollar.
• Adjusted EBITDA¹ amounted to $153 million, an increase of $20 million, or 15%, compared to 2021.
• Net income was $36 million or $1.57 per share compared to $43 million or $1.89 per share in 2021. The decrease is mainly due to lower operating income of $15 million, which included a reduction in Canadian Emergency Wage Subsidy and related expenses of $13 million, partially offset by lower income tax expense of $7 million.
• During Fiscal 2022, GDI acquired Gestion E.C.I. inc., along with its subsidiaries (January 2022), M.T.I. Mechanical Trade Industries Ltd and its subsidiary (March 2022) and Cascadian Building Maintenance, Ltd. (September 2022).

For the years ended December 31, 2022 and 2021, the business segments performed as follows:

(in millions of Canadian dollars)	Janitorial Canada		Janitorial USA		Technical Services		Complementary Services		Consolidated
	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021
Revenue	572	533	678	330	851	685	100	65	2,172	1,597
Organic Growth (Decline)	7 %	0 %	8 %	6 %	10 %	11 %	29 %	(31 %)	9 %	4 %
Adjusted EBITDA^1	71	77	51	31	47	38	1	(1)	153	133
Adjusted EBITDA Margin^1	12 %	14 %	8 %	9 %	6 %	6 %	1 %	(2 %)	7 %	8 %

During Q4 F2022 GDI's Janitorial Canada segment had another strong quarter, recording $144 million in revenue representing an Organic Growth of 3%, while delivering $16 million in Adjusted EBITDA¹, a decrease of $2 million compared to Q4 2021. GDI's Janitorial USA segment also performed well in Q4 2022, recording revenue of $176 million representing Organic Decline of 2% which is mainly attributable to additional incremental services provided in Q4 2021. The Janitorial USA segment recorded Adjusted EBITDA¹ of $14 million in Q4 2022, representing an increase of 75% over Q4 2021, the growth being primarily attributable to the acquisition of IH Services on December 31, 2021. In line with expectations, Adjusted EBITDA margins¹ in both Janitorial segments declined as a lower proportion of COVID-19 related services were provided in the quarter compared to the prior year while contractual recurring revenues increased.

The Technical Services segment recorded revenue of $250 million or growth of 32% over Q4 2021, of which 20% comes from Organic Growth and 9% was generated from acquisitions. The segment recorded Adjusted EBITDA¹ of $17 million compared to $12 million in Q4 2021, representing an Adjusted EBITDA margin¹ of 7%. The Technical Services Segment is now operating at normal seasonal capacity levels after being weighted down by supply chain challenges at the beginning of the year.

Finally, GDI's Complementary Services segment recorded revenue of $25 million and a negative Adjusted EBITDA¹ of $1 million compared to revenue of $18 million and a negative Adjusted EBITDA¹ of $1 million in Q4 2021. This segment also recorded Organic Growth of 39% in Q4 2022, the majority of which was due to GDI's integrated facility services business unit ("GDI IFS") which was launched at the beginning of 2022.

"GDI performed extremely well during F2022," stated Claude Bigras, President & CEO of GDI. "For the first time in our history, we surpassed the $2 billion revenue milestone, cementing GDI's position as one of the largest and the leading facility services provider in North America with the capability to offer a complete range of fully integrated services on a self-perform basis. F2022 also saw our Janitorial USA business grow larger than our Canadian Janitorial business thanks in large part to the IH Services acquisition segment which continues to exceed our expectations."

"During Q4 F2022, each of our core business segments delivered strong results. Our Janitorial businesses in Canada and the USA continued to support clients as occupancy rates in the office market gradually increase as the majority of tenants have instituted hybrid work plans for returning staff, while our clients outside of the office market have largely returned to pre-pandemic occupancy levels. We have seen a progressive pullback in COVID-19 extra services through F2022 in our Canadian Janitorial business which is reflected in the year-over-year margin comparisons, yet the business remains resilient and is delivering solid results. Our Ainsworth Technical Services segment had a very strong quarter with 20% Organic Growth and Adjusted EBITDA margin¹ of 7%. While Q4 is traditionally the strongest quarter for this business segment, the outstanding level of Organic Growth is the result of Ainsworth's formidable competitive positioning in the market. To our knowledge, no other company offers Ainsworth's full suite of multi-trade services across Canada and into the USA on a self-perform basis, which is enabling Ainsworth to win new clients and gain market share. Finally, the outlook for our Complementary Services segment remains positive, with the janitorial products manufacturing and distribution business slowly recovering from it's COVID-19 lows and our IFS business unit building out its pipeline of sales opportunities," stated Mr. Bigras.

"As we begin F2023, I have never seen GDI in a stronger position. We are by far the leading facility services provider in Canada and have a very strong and growing platform in the United States. All of our business segments are performing well and the outlook for each is positive. Our leverage ratio is well within our comfort zone at approximately 2.5x and we have significant capacity on our credit facilities, providing us with the ability to continue to execute on our strategic growth strategy. I would like to take the opportunity to thank all of the team members at GDI for their hard work and dedication, they are the heart of our business and make GDI the company it is today," concluded Mr. Bigras.

ABOUT GDI

GDI is a leading integrated commercial facility services provider which offers a range of services in Canada and the United States to owners and managers of a variety of facility types including office buildings, educational facilities, distribution centers, industrial facilities, healthcare establishments, stadiums and event venues, hotels, shopping centres, airports and other transportation facilities. GDI's commercial facility services capabilities include commercial janitorial and building maintenance, energy advisory and system optimization, the installation, maintenance and repair of HVAC-R, mechanical, electrical and building automation systems, as well as other complementary services such as janitorial products manufacturing and distribution. GDI's subordinate voting shares are listed on the Toronto Stock Exchange (TSX: GDI). Additional information on GDI can be found on its website at www.gdi.com.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute forward-looking information within the meaning of securities laws. Forward looking information may relate to GDI's future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as "may"; "will"; "should"; "expect"; "plan"; "anticipate"; "believe"; "intend"; "estimate"; "predict"; "potential"; "continue"; "foresee"; "ensure" or other similar expressions concerning matters that are not historical facts. In particular, statements regarding GDI's future operating results and economic performance, and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities, which GDI believes are reasonable as of the current date. While management considers these assumptions to be reasonable based on information currently available to the Company, they may prove to be incorrect. It is impossible for GDI to predict with certainty the impact that the current economic uncertainties may have on future results. Forward-looking information is also subject to certain factors, including risks and uncertainties (described in the "Risk Factors" section of the MD&A) that could cause actual results to differ materially from what GDI currently expects. Namely, these factors include risks pertaining to unsuccessful implementation of the business strategy, inherent operating risks of acquisition activity, failure to integrate, decline in commercial real estate occupancy levels, increase in costs which cannot be passed on to customers, labour shortages, disruption in information technology systems and execution issues with Strategic IT projects, increases in interest rates, deterioration in general economic conditions, prolonged armed conflict in Ukraine, COVID-19 and related pandemic, increase in competition, influence of the principal shareholders, loss of key or long-term customers, public procurement laws and regulations, legal proceedings, reputational damage, labour disputes, environmental, social and governance (ESG) considerations, goodwill and long-lived assets impairment charges, tax matters, dependence on key employees, participation in multi-employer pension plans, legislation or other governmental action, exchange rate fluctuations, disputes with franchisees, cybersecurity and data protection, data confidentiality, and public perception of our environmental footprint, many of which are beyond the Company's control. Therefore, future events and results may vary significantly from what management currently foresees. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While management may elect to, the Company is under no obligation and does not undertake to update or alter this information at any particular time, except as may be required by law.

_____________________________

¹  The terms "Adjusted EBITDA" and "Adjusted EBITDA Margin" do not have standardized definitions prescribed by International Financial Reporting Standards and therefore, may not be comparable to similar measures presented by other companies. "Adjusted EBITDA" is defined as operating income before depreciation and amortization, Canadian Emergency Wage Subsidy and related expenses, transaction, reorganization and other costs and share-based compensation. The Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenues. For more details and for a reconciliation of that measure to the most directly comparable IFRS measure, consult the "Operating and Financial Results" section of the Company's Management Discussion & Analysis (MD&A).

Analyst Conference Call:	March 2, 2023 at 9:00 A.M. (ET) Kindly note that Investors and Media representatives may attend as listeners only.
	Please use the following dial-in numbers to have access to the conference call by dialing 10 minutes before the beginning of the conference: North America Toll-Free: 1-888-664-6392 Local: 416-764-8659 (Toronto) or 514-225-6995 (Montreal) Confirmation Code: 52953300
	A rebroadcast of the conference call will be available until March 9, 2023 by dialing: North America Toll-Free: 1-888-390-0541 Local: 416-764-8677 (Toronto) Confirmation Code: 953300 #

December 31, 2022 consolidated financial statements and accompanied Management & Discussion Analysis are filed on www.sedar.com.

GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Financial Position
December 31, 2022 and 2021
(In millions of Canadian dollars)

	2022	2021
Assets
Current assets
Cash	7	24
Trade and other receivables and contract assets	524	431
Current tax assets	7	4
Inventories	45	34
Other financial assets	11	12
Prepaid expenses and other	9	9
Derivatives	3	‒
Total current assets	606	514
Non-current assets
Property, plant and equipment	122	117
Deferred tax assets	‒	1
Intangible assets	139	143
Goodwill	344	302
Derivatives	1	‒
Other assets	8	8
Total non-current assets	614	571
Total assets	1,220	1,085
Liabilities and Shareholders' Equity
Current liabilities
Bank indebtedness	10	3
Trade and other payables	286	250
Provisions	26	28
Contract liabilities	30	43
Current tax liabilities	2	5
Current portion of long-term debt	43	28
Total current liabilities	397	357
Non-current liabilities
Long-term debt	345	299
Long-term payables	5	7
Deferred tax liabilities	34	31
Total non-current liabilities	384	337
Shareholders' equity
Share capital	379	371
Retained earnings	49	13
Contributed surplus	4	6
Accumulated other comprehensive income	7	1
Total shareholders' equity	439	391
Total liabilities and shareholders' equity	1,220	1,085

GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Comprehensive Income
Years ended December 31, 2022 and 2021
(In millions of Canadian dollars, except for earnings per share)

	2022	2021
Revenues	2,172	1,597
Cost of services	1,733	1,257
Selling and administrative expenses	294	214
Transaction, reorganization and other costs	3	3
Canadian Emergency Wage Subsidy and related expenses	‒	(13)
Amortization of intangible assets	28	20
Depreciation of property, plant and equipment	46	33
Operating income	68	83
Net finance expense	19	20
Income before income taxes	49	63
Income tax expense	13	20
Net income	36	43
Other comprehensive income
Gains (losses) that are or may be reclassified to earnings:
Foreign currency translation differences for foreign operations	19	(1)
Hedge of net investments in foreign operations, net of tax of nil	(16)	1
Cash flow hedges, effective portion of changes in fair value, net of tax of ($1) (($1) in 2021)	3	2
	6	2
Total comprehensive income	42	45
Earnings per share:
Basic	1.57	1.89
Diluted	1.53	1.84

GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Changes in Equity
Years ended December 31, 2022 and 2021
(In millions of Canadian dollars)

	Share capital		Retained earnings (deficit)	Contributed surplus	Accumulated other comprehensive income (loss)	Total
	Number (in thousands of shares)	Amount
Balance, January 1, 2021	22,780	363	(30)	6	(1)	338
Net income	‒	‒	43	‒	‒	43
Other comprehensive income	‒	‒	‒	‒	2	2
Total comprehensive income for the year	‒	‒	43	‒	2	45
Transactions with owners of the Company:
Share-based compensation	‒	‒	‒	2	‒	2
Stock options exercised	341	8	‒	(2)	‒	6
Balance, December 31, 2021	23,121	371	13	6	1	391
Net income	‒	‒	36	–	‒	36
Other comprehensive income	‒	‒	‒	–	6	6
Total comprehensive income for the year	–	–	36	–	6	42
Transactions with owners of the Company:
Share-based compensation	–	–	–	1	–	1
Stock options exercised	340	9	‒	(2)	‒	7
Shares repurchased for cancellation	(47)	(1)	‒	(1)	‒	(2)
Balance, December 31, 2022	23,414	379	49	4	7	439

GDI INTEGRATED FACILITY SERVICES INC.
Consolidated Statements of Cash Flows
Years ended December 31, 2022 and 2021
(In millions of Canadian dollars)

	2022	2021
Cash flows from (used in) operating activities
Net income	36	43
Adjustments for:
Depreciation and amortization	74	53
Equity portion of share-based compensation	1	2
Net finance expense	19	20
Income tax expense	13	20
Income taxes paid	(23)	(33)
Net changes in non-cash operating assets and liabilities	(70)	12
Net cash from operating activities	50	117
Cash flows from (used in) financing activities
Proceeds from issuance of long-term debt	217	247
Repayment of long-term debt	(192)	(141)
Payment of lease liabilities	(29)	(20)
Interest paid	(11)	(4)
Other	5	6
Net cash (used in) from financing activities	(10)	88
Cash flows from (used in) investing activities
Business acquisitions, net of cash and bank indebtedness acquired	(37)	(164)
Additions to property, plant and equipment	(19)	(15)
Additions to intangible assets	(7)	(4)
Other	‒	1
Net cash used in investing activities	(63)	(182)
Foreign exchange loss on cash held in foreign currencies	(1)	‒
Net change in cash (bank indebtedness)	(24)	23
Cash (bank indebtedness), beginning of period:
Cash	24	3
Bank indebtedness	(3)	(5)
	21	(2)
(Bank indebtedness) cash, end of period:
Cash	7	24
Bank indebtedness	(10)	(3)
	(3)	21

GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
Years ended December 31, 2022 and 2021
(In millions of Canadian dollars) 

							2022
	Janitorial Canada	Janitorial USA	Technical Services	Complementary Services	Corporate and Eliminations	Total
Recurring/contractual services	473	624	90	15	‒	1,202
On-call services	62	53	241	3	‒	359
Project	‒	‒	511	‒	‒	511
Manufacturing and distribution	‒	‒	‒	63	‒	63
Other revenues	28	1	7	1	‒	37
Total external revenues	563	678	849	82	‒	2,172
Inter-segment revenues	9	‒	2	18	(29)	‒
Revenues	572	678	851	100	(29)	2,172
Income (loss) before income taxes	59	29	8	(3)	(44)	49
Net finance expense	(1)	6	3	‒	11	19
Operating income (loss)	58	35	11	(3)	(33)	68
Depreciation and amortization	13	16	35	4	6	74
Transaction, reorganization and other costs	‒	‒	1	‒	2	3
Share-based compensation ^(1)	‒	‒	‒	‒	8	8
Adjusted EBITDA	71	51	47	1	(17)	153
Total assets	267	320	515	74	44	1,220
Total liabilities	81	68	232	15	385	781
Additions to property, plant and equipment	8	9	24	2	6	49
Additions to intangible assets	‒	2	10	‒	7	19
Additions to goodwill	‒	6	27	‒	‒	33

^{(1)    Includes stock option plans, performance share unit plan and restricted share unit plan}

GDI INTEGRATED FACILITY SERVICES INC.
Segmented information
Years ended December 31, 2022 and 2021
(In millions of Canadian dollars)

							2021
	Janitorial Canada		Janitorial USA	Technical Services	Complementary Services	Corporate and Eliminations	Total
Recurring/contractual services	411		291	90	‒	‒	792
On-call services	83		39	188	‒	‒	310
Project	‒		‒	406	‒	‒	406
Manufacturing and distribution	‒		‒	‒	50	‒	50
Other revenues	38		‒	1	‒	‒	39
Total external revenues	532		330	685	50	‒	1,597
Inter-segment revenues	1		‒	‒	15	(16)	‒
Revenues	533		330	685	65	(16)	1,597
Income (loss) before income taxes	64		20	9	(4)	(26)	63
Net finance expense	‒		4	2	‒	14	20
Operating income (loss)	64		24	11	(4)	(12)	83
Depreciation and amortization	13		7	26	3	4	53
Canadian Emergency Wage Subsidy and related expenses	‒		‒	‒	‒	(13)	(13)
Transaction, reorganization and other costs	‒		‒	1	‒	2	3
Share-based compensation ^(1)	‒		‒	‒	‒	7	7
Adjusted EBITDA	77		31	38	(1)	(12)	133
Total assets	262		323	398	70	32	1,085
Total liabilities	83		91	204	15	301	694
Additions to property, plant and equipment	5		13	28	14	6	66
Additions to intangible assets	2		36	24	3	3	68
Additions to goodwill	2		54	32	1	‒	89

^{(1)    Includes stock option plans, performance share unit plan and restricted share unit plan}

GDI INTEGRATED FACILITY SERVICES INC.
Business acquisitions
Years ended December 31, 2022 and 2021
(In millions of Canadian dollars)

Acquisition date	Company acquired	Location	Segment reporting
2022 Acquisitions
January 21, 2022	Gestion E.C.I. inc. and its subsidiaries ("Énergère")	Montréal, Quebec	Technical Services
March 1, 2022	M.T.I. Mechanical Trade Industries Ltd. and its subsidiary ("MTI")	Markham, Ontario	Technical Services
September 1, 2022	Cascadian Building Maintenance, Ltd. ("Cascadian")	Bellevue, Washington	Janitorial USA
2021 Acquisitions
January 1, 2021	The BPAC Group, Inc. and its subsidiaries ("BP")	New York, New York	Technical Services
September 1, 2021	Enginuity, LLC ("Enginuity")	Mechanicsburg, Pennsylvania	Technical Services
September 15, 2021	Fuller Industries, LLC ("Fuller")	Great Bend, Kansas	Complementary Services
December 31, 2021	IH Services, Inc. and its subsidiaries ("IH")	Greenville, South Carolina	Janitorial USA

GDI INTEGRATED FACILITY SERVICES INC.
Supplementary Quarterly Financial Information
Three-month periods
(Unaudited) (In millions of Canadian dollars, except per share data)

Three-month periods ended (in millions of Canadian dollars, except per share data)^(1)	December 2022	September 2022		June 2022		March 2022
Revenue	588	563		526		495
Operating income	15	19		17		18
Depreciation and amortization	22	18		18		16
Transaction, reorganization and other costs	1	1		1		‒
Share-based compensation	3	2		1		2
Adjusted EBITDA	41	40		37		36
Net income for the period	10	11		10		7
Earnings per share
Basic	0.41	0.45		0.40		0.30
Diluted	0.40	0.44		0.40		0.30
Three-month periods ended (in millions of Canadian dollars, except per share data)^(1)	December 2021	September 2021		June 2021		March 2021
Revenue	433	408		372		384
Operating income	15	18		24		27
Depreciation and amortization	15	13		12		12
Canadian Emergency Wage Subsidy and related expenses	‒	(1)		(5)		(7)
Transaction, reorganization and other costs	2	1		‒		1
Share-based compensation	2	2		2		1
Adjusted EBITDA	34	33		33		34
Net income for the period	7	9		14		13
Earnings per share
Basic	0.30	0.41		0.61		0.57
Diluted	0.29	0.40		0.59		0.56

(1) The differences between the quarters are mainly the results of business acquisitions, as well as seasonality in the Technical Services segment. The net income for the three-month periods ended March 31, 2021, June 30, 2021 and September 30, 2021 were favourably impacted by the Canadian Emergency Wage Subsidy and related expenses.

SOURCE GDI Integrated Facility Services Inc.

Investors, Analysts and Media, David Hinchey, Executive Vice President of Corporate Development, Telephone: [phone] ext. 282